AFR in The News – The Push to Pull the Teeth out of Dodd-Frank

Katherine Reynolds Lewis (The Fiscal Times)
September 29, 2011

“Shannon Greene, CEO of a Fort Worth leather supplier, ruefully recalls what happened to her business the last time Washington overhauled financial regulations. To comply with the 2002 Sarbanes-Oxley Act, Greene had to hire outside consultants and spend nearly nine months revamping procedures and controls –- at a total cost of $200,000, or 6 percent of her company’s earnings in 2004. ‘It was very painful, very stressful,’ says Greene, whose Tandy Leather Factory has 450 employees and 107 stores worldwide. ‘Could we have opened a few more stores with that $200,000? Absolutely.’ Greene didn’t see a single tangible benefit to the expense and hassle of Sarbanes-Oxley, which she believes punished law-abiding companies for the mistakes of a few bad apples. Now that federal regulators are beginning to write the nearly 400 rules mandated by the Dodd-Frank financial overhaul enacted last year, private-sector companies and their allies in Congress want the experience of Sarbanes-Oxley to stand as a cautionary tale for rules that may impose heavy costs on Corporate America without always demonstrating benefits. … A bill proposed by Sen. Richard Shelby, R-Ala., would force regulators to determine the economic impact of proposed rules, including on growth and job creation. Bills introduced in the House would take a similar approach. … The current economic turbulence is a direct result of insufficient regulation — so it makes no sense to curb pending rules that would address the causes of the crisis, says Lisa Donner, executive director of Americans for Financial Reform, a coalition of labor, civil rights, community, and small business groups. “The thought that what we need to get the economy going again is to cut back on regulation is astoundingly backwards,” she says, noting that recent polls suggest businesses are struggling with economic conditions, not overregulation.” Click here for more.